Spring is usually considered the freshest of the four seasons – blooming flowers and new buds re-emerging after the winter chill. Unfortunately, the continued increase of the nation’s inflation rate has kept the “chill” in the air. Currently, the nation’s inflation rate is 8.54% – the highest this number has been since 1981. To better understand how quickly things are changing, consider the inflation rate this time last year – 2.62%.
If you don’t already know about inflation, it’s good to understand what it is and why it affects the economy. Simply put, inflation measures the rise/change of prices and goods over time. Inflation is always present in the economy, and it’s not necessarily a bad thing. It’s like bacteria in the body – you need some, but too much can cause infections and other problems. High inflation raises prices and hinders the economy because it makes it harder to buy/sell goods and services.
The recent/ongoing covid pandemic has wreaked much havoc on people, the health care system, and the economy by creating a “toxic” environment that sent the inflation rate “through the roof.” Last year saw several product shortages and supply chain interruptions. The high demand for goods never went down, and the supply could not keep up – thus, inflation increased as prices increased because supplies were limited.
The continued increase of inflation impacts everything, including the solar industry and access to clean energy. Because the price of consumer goods and services has steadily increased, this makes a solar system for home more expensive than it was even six months ago. And in addition to the increase in prices, there’s also the continued issue with supply chain disruptions and solar installers having enough product to meet the demand.
Before 2021 and the beginning rise of inflation, the solar industry showed record growth in the United States. Even during the height of the pandemic in 2020, solar installations had increased by over 40%. Prices had dropped significantly over the previous ten years, making the switch to clean energy far more affordable. Part of the reason many people rejected solar energy in the past was the cost. However, between 2008 and 2018, the price for a residential solar system for home dropped by almost 70 percent.
Now, because of inflation and renewed import tariffs placed on solar panels, the cost of clean energy has risen somewhat. Recent reports show the cost of solar panels going up as much as 50% and wind turbines increasing in price by 13%. Some of the increased cost is due to import tariffs before 2020. The tariffs affect the solar industry because almost 80% of solar panels sold in the US are imported from other countries. The recent renewal of these tariffs is causing some concern in the clean energy industry.
With the issues caused by inflation and supply chain disruption, and import tariffs, is this still a good time to switch to solar energy? Absolutely. Even with an increase in the price of products and installation, there are still multiple benefits to relying on clean energy vs. traditional electricity. Among the “pros” is the federal tax credit that allows homeowners to claim 26% of the installation costs.
Any California resident who relies on PG&E for electricity has already seen two rate increases in 2022. Transitioning to solar energy means not worrying about any more rate increases. Plus, your solar energy system can supply enough power for your home, and you may even “make” enough to sell back to the electric company. Additionally, installing solar energy can also increase the value of your home!
The current inflation rate affects the solar industry, but it’s still possible to switch to clean energy and stop relying on the power grid. There’s no reason to wait any longer to find out more about solar energy. Take back your power and stop paying “their” rates. Bright Planet Consulting offers an in-depth energy analysis and will create a customized plan to fit your energy needs.